More startups than ever are exporting from the get-go as a core businesses strategy.
In fact, data from the Office for National Statistics show the number of exporting UK SMEs grew by nearly 7% in 2017 compared to the year previously, meaning 10% of all SME’s now export.
Whereas it can be commonly thought to cement a standing in the local market before increasing operations to a global scale, hungry new SMEs are becoming more confident that they can incorporate international trade as part of their first years in business.
Naturally, as a consultancy that helps firms of all sizes profitably expand abroad, we love seeing ambitious new companies looking at opportunities wherever they may lie, and not just planning to slug away at what could be a saturated local territory.
The abundance of free trade deals, enhanced business-to-business technologies and also consumer shopping portals that transcend country borders makes exporting more accessible for new firms (and with some expert guidance along the way to identify markets, research potential markets and map out entry strategies from Go Exporting!).
So, if you have a great business idea, you’ve just opened your doors to customers or your products are already en route to your warehouse, here are three pieces of advice for getting started.
Ask yourself why a certain market
If you already have a certain export market in mind, ask yourself why you’re considering that market. Partly, make sure it’s not a vanity project. For example, you could have visited a certain country and now dream about seeing your product or brand in that territory the next time you visit, and the idea has stuck in your mind.
But great business decisions, especially at such a tender stage in a businesses lifecycle, require more strategic thinking. Yes, it might sound impressive to be able to say to your investors, customers and peers that your product is sold in the likes of the USA and Australia. But your biggest potential customer base and profit potential could be within an emerging market instead.
So, make sure you do your research…
It cannot be underestimated how important market research is. And that doesn’t mean a quick Google to see if there are any direct competitors already in that market.
How certain are you that your initial ideas for target markets are looking for a product or service just like yours? How open are consumers in that territory to buying international products or adopting a service that could be new to them? How much sales and educational marketing budget may be required? What are the barriers to entry for that market, including any potential tariffs, border checks, a risk of stock theft, financial transaction barriers?
Thorough and detailed market research will help identify potential markets, earmark those to avoid and even give you a list of potential targets for phase 2 or 3 of business growth where additional funding or operational resource may be required.
Map a route to market
In both a literal and business sense, key to a successful export plan is to map out the route to penetrating that market.
Many exporting businesses benefit from forging initial partnerships in export countries to help spearhead initial growth in that territory, including local distributors, trade stockists, local outsourced sales teams and so on.
Read more: 10% of SMEs now exporting
If you’re shipping and selling your own products, remember that space + time = money away from your potential profit margins if you plan to sit your goods in the export territory, so sending a large chunk of your stock to sit in a warehouse for a few months whilst your work out the business and sales technicalities and finding those first customers will likely be a short-term waste of financial resource.
So have a clear pathway, including a list of things that have to be done before any product is shipped or sales push begins in the target country.
Find out how Go Exporting can open a world of opportunities for your business here.